Seoul Audit Committee Announces Investigation Results on 'Platform Changdong 61'... "Overall Issues in Construction Process and Private Consignment"

"20 Billion Won Invested in Han-si Project and Procedures Ignored for Faster Progress"…Notification of Disciplinary Actions and System Improvement Measures

[Asia Economy Reporter Lim Cheol-young] The Seoul Metropolitan Government's investigation into the ‘Platform Changdong61’ project, initiated in 2015 as a pioneering effort for the ‘Seoul Arena,’ revealed overall issues in the preliminary procedures for project promotion, construction processes, and the selection and operation of private consignment companies.

On the 27th, Seoul announced that following the Audit Committee's review on the 22nd, it notified the relevant departments of ‘Platform Changdong61’ and the Seoul Housing and Communities Corporation (SH Corporation), which was in charge of project execution, on the 24th regarding personnel measures for the responsible officials at the time and demands for institutional improvements.

‘Platform61’ is a cultural and artistic space composed of 61 container boxes, opened in April 2016 as a temporary space operating until August 2022. The consignment company selected through bidding plans and operates music performances, exhibitions, and citizen participation programs, as well as manages space rental within the facility.

‘Platform61’ was planned as a pioneering project to enhance the cultural and artistic capabilities of the Changdong-Sanggye area and improve its image as a culturally marginalized region, ahead of the opening of the ‘Seoul Arena,’ a core part of the ‘Changdong-Sanggye New Economic Center Plan’ announced by the city in February 2015.

The Audit Committee judged that ‘Platform61’ made unusually rapid and bold investment decisions under the pretext of being a pioneering project, disregarding necessary procedures in the process. The committee noted that Seoul delegated the project execution to SH Corporation instead of directly managing it, and SH Corporation used ‘standby funds’ of a contingency nature without following the normal budget allocation procedures. Consequently, despite being a temporary project, a total budget exceeding 20 billion KRW (8.1 billion KRW for construction and 12.2 billion KRW for operating expenses) was invested over seven years, including an increase in construction costs from 4.1 billion KRW to 8.1 billion KRW without thorough review.

Problems were also identified during the operation phase. The first consignment operator selected for ‘Platform61’ was a company that had conducted research services to prepare the planning and operation plan for ‘Platform61,’ thus participating in the bidding with prior access to internal information related to the project. Additionally, unlike typical consignment projects, an abnormal structure was found where an intermediary support organization called the ‘Planning and Operation Committee,’ which has no legal basis, exercised full authority over the entire project as an advisory body.

The main issues revealed by this investigation include ▲non-compliance with budget-related regulations and procedures to hasten the opening date ▲problems with decisions to increase project costs and excessive construction cost increases ▲unfairness in selecting consignment companies ▲operation of unnecessary intermediary support organizations (Planning and Operation Committee) ▲wasteful budget expenditures and unfair selection of resident organizations ▲lack of guidance and supervision by SH Corporation as the project executor.

The Seoul Audit Committee plans to finalize the investigation results after notifying the relevant institutions and departments of the findings and conducting a one-month re-examination process. Kim Hyung-rae, Seoul’s Investigation Officer, stated, “The essence of private consignment projects is to fairly select specialized companies that can handle tasks more efficiently than the city, and the city must meticulously oversee the entire process, including budget usage by the selected operators. We plan to urge each department to exercise special caution to prevent procedural violations or unfair practices in other private consignment projects in the future.”

This content was produced with the assistance of AI translation services.